* Asian stock markets : https://tmsnrt.rs/2zpUAr4
* Nikkei bounces 1%, still down sharply for week
* China Jan PMI at 50 as expected, services stronger
* WHO confident China steps will contain virus
* Amazon surges 11% as sales beat forecasts
By Wayne Cole
SYDNEY, Jan 31 (Reuters) - Asian share markets fought to
regain their footing on Friday as investors clutched at hopes
China could contain the coronavirus, even as headlines spoke of
more cases, mounting deaths, flight suspensions and production
pauses at factories.
The World Health Organization on Thursday declared a global
emergency as the virus spread to more countries.
Tedros Adhanom Ghebreyesus, WHO director-general, said the
greatest worry was the potential for the virus to spread to
countries with weaker health systems. MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS extended its fall, dropping 0.4%, to be poised
for its worst weekly loss in a year of 4.6%. Its 2.3% dive on
Thursday had been the sharpest one-day loss in six months.
Japan's Nikkei .N225 bounced 1%, but again was off 2.6%
for the week. Hong Kong's Hang Seng .HSI drifted 0.3% lower
and has shed 9% in the two weeks since the virus began roiling
financial markets. Korea's Kospi .KS11 had its worst week in
15 months, losing 5.6%.
Halting further slides were WHO comments that the drastic
steps Beijing was taking would "reverse the tide" and contain
the outbreak.
E-Mini futures for the S&P 500 ESc1 added 0.1%, having
rebounded 0.5% late on Thursday. European bourses looked set to
open firmer with EUROSTOXX 50 futures STXEc1 up 0.5% and the
FTSE FFIc1 0.5%.
Helping the mood, too, were surveys showing Chinese
manufacturing activity came in much as expected in January while
services actually firmed, though this was likely before the
virus took full hold. Indeed, reports some Chinese provinces were asking companies
not to re-start until Feb. 10 suggested activity would take a
hard knock this month.
"Some shorts covered after the director gave the WHO's stamp
of approval to China's aggressive containment effort," said
Stephen Innes, Asia Pacific market strategist at AxiCorp.
"For now, the market's risk lights have shifted from
flickering on red to a steady shade of amber, which could bring
more risk back into play."
Sentiment also received a timely boost when Amazon's
AMZN.O sales blew past forecasts and sent its stock soaring
11% after hours, adding over $100 billion in market worth.
Still, the flow of news on the virus remained bleak with
China's Hubei province reporting deaths from the disease had
risen by 42 to 204 as of the end of Jan. 30. More airlines curtailed flights into and out of China and
companies temporarily closed operations, while the U.S. State
Department told citizens not to travel to any part of China.
JPMorgan shaved its forecast for global growth by 0.3%
points for this quarter to reflect the growing impact.
"Based on the patterns observed from other epidemics, we
assume that the outbreak will likely run its course over 2-3
months, meaning the hit to activity happens in the current
quarter" JPMorgan analysts said in a note.
"Also in line with historical experience, we expect a full
recovery to follow."
BONDS CAN'T BE BEAT
The drum beat of bad news kept safe-haven bonds well bid,
with yields on U.S. 10-year Treasuries US10YT=RR down 9 basis
points for the week so far and near four-month lows.
The yield curve between three-month bills and 10-year notes
had also inverted twice this week, a bearish economic signal.
In currencies, sterling held firm after jumping on Thursday
when the Bank of England confounded market expectations by not
cutting interest rates. GBP/
The pound was last at $1.3098 GBP=D3 , a relatively calm
performance given Friday is the day the UK officially leaves the
European Union after years of political turmoil. The dollar took a knock overnight when data showed the U.S.
economy grew at its slowest annual pace in three years and
personal consumption weakened sharply. Yet it was up a fraction on the yen on Friday at 109.03
JPY= and stronger on the euro at $1.1016 EUR= .
Most of the action this week has been nervous investors
selling emerging currencies for dollars and yen, leaving the
majors little changed against each other. EMRG/FRX
Spot gold was flat for the week at $1,573.72 per ounce
XAU= , having failed to get much of a safe-haven bid as a range
of other commodities, from copper to soy beans, were hammered by
worries over Chinese demand.
Oil bounced on short covering, after hitting its lowest in
three months as the global spread of the coronavirus threatened
to curb demand for fuel. O/R
U.S. crude CLc1 regained 89 cents to $53.03 a barrel,
while Brent crude LCOc1 futures rose 83 cents to $59.12.
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Asia-Pacific valuations https://tmsnrt.rs/2Dr2BQA
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(Editing by Sam Holmes & Shri Navaratnam)